How does the setting Damage Cap work?

I couldn't find this in the wiki. Does anyone know how it works?

Its a Savage Worlds Setting rule. No attack will cause more than 4 wounds. You can easily see it in action. Just have an attack on someone in the tracker. You can manually change the damage (say make it 100 points). If the damage cap setting is on, it will cap to 4 wounds. If not, the result will be many more wounds.